Airlines clear first installment of ATF dues to OMCs
18 Nov 2008
Mumbai: Under the terms of an agreement arrived at between state-owned oil marketing companies (OMCs) and domestic airlines, the first installment of outstanding fuel bills has now been cleared on Monday. This relief package announced by the government recently allowed domestic carriers to clear dues of around Rs2,962 crore in six equal installments by March 2009.
The relief package also extended the 90-day credit facility for fresh purchases of aviation turbine fuel (ATF).
According to market sources, while Kingfisher Airlines cleared Rs168 crore and state-owned National Aviation Company of India (NACIL) cleared Rs115 crore of their accumulated backlogs on Monday. India's largest private carrier, Jet Airways, has cleared Rs145 crore.
While Jet Airways owes a staggering Rs1,576 crore to OMCs, Kingfisher and NACIL owe Rs983 crore and Rs886 crore respectively.
These huge outstanding positions had compelled petroleum minister Murli Deora to quip: "We do not want any airline to stop operations, but they should not fly at the expense of OMCs. They should try to manage their finances well instead of just building up dues with the oil companies."
Industry experts say the government will have to take a call whether they wish to extend the credit period to airlines or they want them to cease operations.
